K. Kuttykrishnan S/O Karuppu Swami v The Peruvamba Service Co-Operative Bank Ltd., State of Kerala, Joint Registrar of Co-operative Societies Palakkkad

**IN THE HIGH COURT OF KERALA AT ERNAKULAM** **PRESENT:** **THE HONOURABLE MR.JUSTICE V.CHITAMBARESH &** **THE HONOURABLE MR. JUSTICE SATHISH NINAN** **TUESDAY, THE 3RD DAY OF JULY 2018 / 12TH ASHADHA, 1940** **WA.No. 213 of 2015 IN WPC. 29925/2007** **AGAINST THE JUDGMENT IN WP(C) 29925/2007 of HIGH COURT OF KERALA DATED 16-09-2014** **APPELLANT/3RD RESPONDENT** **K.KUTTYKRISHNAN S/O. KARUPPU SWAMI, POORADOM, KODUMBA P.O - 678 551.** **BY ADV.DR.GEORGE ABRAHAM** ## **RESPONDENTS/PETITIONER & RESPONDENTS:** **1. THE PERUVAMBA SERVICE CO-OPERATIVE BANK LTD., NO.F 1648, P.O.PERUVAMBA, PALAKKAD DISTRICT - 678 531.** **2. STATE OF KERALA REPRESENTED BY CHIEF SECRETARY, SECRETARIAT, THIRUVANANTHAPURAM - 695 001.** **3. THE JOINT REGISTRAR OF CO-OPERATIVE SOCIETIES PALAKKAD.** **R1 BY ADV. SRI.M.P.ASHOK KUMAR** **R2 &R3 BY GOVERNMENT PLEADER SMT.K.R.DEEPA** **THIS WRIT APPEAL HAVING BEEN FINALLY HEARD ON 29-06-2018, THE COURT ON 03.07.2018 DELIVERED THE FOLLOWING:** **vdv** ## **V.Chitambaresh & Sathish Ninan, JJ. ==============================** ## **W.A No.213 of 2015** **========================== Dated this the 3[rd] day of July, 2018** ## **JUDGMENT** ## **Sathish Ninan, J** Dismissal of the appellant from the services of the first respondent Bank was interfered with by the Government under Section 83 (1)(j) of the Co-operative Societies Act as per Ext P7 order. The order was interfered by the learned single judge, restoring the order of dismissal. The delinquent is in appeal. 2. The appellant was employed as the Secretary of the first respondent Bank. While so, disciplinary action was initiated against him alleging misconduct. Ext P1 is the memo of charges. The gist of the charges are: a. Gold loans were granted to the wife of the appellant at lower rate of interest than the rate fixed by the Bank. W.A No.213/2015 2 b. Gold loans were granted to the relatives of Bank employees at lesser rate of interest than the fixed rate. c. Regarding gold loans, excess amounts were paid to borrowers than the rate fixed by the Bank as payable per gram, in spite of a show cause notice regarding earlier similar conduct. d. Non maintaining of proper account and ledger regarding transaction with Palakkad District Co-operative Bank. e. Irregularities in the purchase of chairs for the Bank, whereby five chairs were appropriated for own use. f. Acting against the best interests of the Bank and the Board. W.A No.213/2015 3 g. Acting contrary to the high standards expected from the senior officer in the Bank. h. Acts of indiscipline amounting to misconduct and affecting the discipline of other employees of the Bank. 3. In the domestic enquiry, the appellant was found guilty. The matter was placed before the sub committee constituted under Rule 198 of the Co-operative Societies Rules (herein after referred to as the “Rules”). The sub committee concurred with the findings in the enquiry and proposed dismissal of the appellant from service. The appellant preferred appeal to the Board of management. The Board dismissed the appeal. The appellant preferred revision before the Joint Registrar of Co-operative Societies under Rule 176 of the Rules. As per Ext P4 order W.A No.213/2015 4 the Joint Registrar set aside the order of dismissal. The reasons stated for interfering with the order of dismissal was that, opportunity was not given to the appellant to restore the money to the Bank. The said order was challenged by the Bank before this Court in O.P No.20627 of 2000. This Court found that the order passed by the Joint Registrar was bad in law since under Rule 176 of the Rules, the Joint Registrar could interfere only if the order is against the provisions of the Act, Rules or byelaws or against the best interest of the Society. None of the said grounds were found by the Joint Registrar. This Court directed the Joint Registrar to pass fresh orders. 4. Thereafter Ext P6 order dated 10.10.2005 was passed by the Joint Registrar affirming the order of dismissal. The appellant approached the Government in appeal under Section 83(1)(j) and Rule 124 of the Kerala W.A No.213/2015 5 Co-operative Societies Act and Rules. As per Ext P7 order, the Government set aside the order of dismissal and directed reinstatement with full backwages. It was challenged by the Bank before this Court in W.P(C) No.29925 of 2007. The learned Single Judge as per the impugned judgment interfered with the order passed by the Government, quashed the same and thus restoring the order of dismissal. Hence the appeal by the delinquent. 5. Heard Dr.George Abraham, learned counsel for the appellant, Sri.M.P.Ashok Kumar learned counsel for the 1[st] respondent and the learned Senior Government Pleader for respondents 2 and 3. 6. As noticed first above, the appellant was holding the post of Secretary of the bank. He being the highest officer, utmost honesty and good faith is expected in his conduct. He holds an office of trust. The gist of the memo W.A No.213/2015 6 of charges levelled against him have been mentioned supra. The disciplinary committee, on evidence, found the charges proved. The findings were re-looked by the sub committee and the Board. The Government while interfering with the said order, has not entered a finding that the charges levelled against the appellant are not proved or that the findings by the authorities are not substantiated with the available evidence. Though the learned counsel for the appellant would submit that the offences alleged are minor or trivial in nature, he would not attempt to substantiate that the charges levelled, except regarding the appropriation of chairs, are not proved or are not correct. The substance of his arguments is that the punishment is disproportionate to the charges levelled. Though he attempted to support Ext P7 order passed by the Government, for the reasons stated we concur with the W.A No.213/2015 7 finding of the learned Single Judge that Ext P7 is illegal. In Ext P7 order, the Government has found fault with the Joint Registrar for having arrived at a varying conclusion from the earlier order passed by the Registrar, even in the absence of any fresh evidence. Here it is pertinent to notice that as per the judgment in O.P No.20627 of 2000, this Court had held that the earlier order passed by the Joint Registrar is unsustainable and beyond the realm of Rule 176 of the Rules. The only other reason stated in the order is that the appellant had been in service for a long period and that there had been no previous disciplinary proceedings against him. That cannot be a ground to interfere with the order of dismissal, considering the office the appellant held and the nature of charges. The Registrar was acting in exercise of the powers under Rule 176 of the Rules whereunder, the W.A No.213/2015 8 jurisdiction is limited to consider if the order is against the provisions of the Act, Rules or bye-laws or against the best interest of the Society. The Government, in an appeal under Section 83(1)(j) is only considering the correctness of the exercise of powers under Rule 176 by the Registrar. Therefore, the scope of interference is limited. Even otherwise, there is no material to hold that the finding of the charges by the authorities is unsustainable. 7. The Apex Court in **Mahadeo Bajirao Patil v State of Maharashtra and Others ((2005)7 SCC 435)** held thus: “A Bank officer is required to exercise higher standards of honesty and integrity. He deals with money of the depositors and the customers. Every officer/employee of the bank is required W.A No.213/2015 9 to take all possible steps to protect the interests of the bank and to discharge his duties with utmost integrity, honesty, devotion and diligence and to do nothing which is unbecoming of a bank officer. Good conduct and discipline are inseparable from the functioning of every officer/employee of the bank. As was observed by this Court in _Disciplinary Authority-cum-Regional Manager v Nikunja Bihari Patnaik,_ it is no defence available to say that there was no loss or profit which resulted in the case, when the officer/employee acted without authority. The very discipline of an W.A No.213/2015 10 organisation more particularly a bank is dependent upon each of its officers and officers acting and operating within their allotted sphere. Acting beyond one's authority is by itself a breach of discipline and is a misconduct. The charges against the employee were not casual in nature and were serious. That being so, the plea about absence of loss is also sans substance.” 8. In **Achaldas Durgaji Oswal v Ramvilas Gangabisan Heda ((2003)3 SCC 605)** the Apex Court cautioned that scope for interference by the court with the quantum of punishment is very limited and restricted. It was further held that while considering the proportionality of the punishment, it is not only the amount involved, but the W.A No.213/2015 11 mental set-up, the type of duty performed and similar relevant circumstances should go into the decision making process. The Apex Court observed thus: “If the charged employee holds a position of trust where honesty and integrity are inbuilt requirements of functioning, it would not be proper to deal with the matter leniently. Misconduct in such cases has to be dealt with iron hands. Where the person deals with public money or is engaged in financial transactions or acts in a fiduciary capacity, the highest degree of integrity and trustworthiness is a must and unexceptionable.” W.A No.213/2015 12 9. In **Union Of India and Others v K.K.Dhawan ((1993)2 SCC 56)** the Apex Court referred to a statement by Lord Coke which reads thus: “Though the bribe may be small, yet the fault is great.” The Apex Court held that what is relevant is the conduct of the respondent in discharge of his duties as an officer. 10. In **Divisional Controller, N.E.K.R.T.C v H.Amaresh ((2006)6 SCC 187)** the Apex Court held thus: “This Court in a catena of judgments held that the loss of confidence is the primary factor and not the amount of money misappropriated and that the sympathy or generosity cannot be a factor which is impermissible in law. When an employee is found guilty of pilferage or of W.A No.213/2015 13 misappropriating the Corporation's funds. There is nothing wrong in the Corporation losing confidence or faith in such an employee and awarding punishment of dismissal. In such cases, there is no place for generosity or misplaced sympathy on the part of the judicial forums and interfering therefore with the quantum of punishment.” 11. In **State Bank of India and Others v S.N.Goyal** ( **(2008)8 SCC 92)** the Apex Court held thus: “At the relevant point of time the respondent was functioning as a Branch Manager. A Bank survives on the trust of its clientele and constituents. The W.A No.213/2015 14 position of the Manager of a bank is a matter of great trust. The employees of the bank in particular the Manager are expected to act with absolute integrity and honesty in handling the funds of the customers/borrowers of the bank. Any misappropriation, even temporary, of the funds of the bank or its customers/borrowers constitutes a serious misconduct, inviting severe punishment. When a borrower makes any payment towards a loan, the Manager of the bank receiving such amount is required to credit it immediately to the borrower's account. If the matter is to be viewed lightly or leniently it will W.A No.213/2015 15 encourage other bank employees to indulge in such activities thereby undermining the entire banking system. The request for reducing the punishment is misconceived and rejected.” 12. Therefore, it is beyond deliberation that considering the high degree of trust, integrity and honesty that is warranted for the post that was held by the appellant, any conduct on his part as referred to in the memo of charges dis-entitles him from continuing in service. As noticed supra, there is no material to dislodge the finding of charges levelled against the appellant. On the law as laid by the Apex Court, we do not think that the punishment awarded is excessive or disproportionate. 13. Though the appellant raises a plea that the writ W.A No.213/2015 16 petition is bad for non-joinder of the Secretary of Cooperative Societies who has passed Ext P7 order on behalf of the Government, the State having been represented in the proceedings by the Chief Secretary, we do not find any merit in the said contention. The appeal fails and is accordingly dismissed. Sd/- **V.Chitambaresh, Judge** Sd/- **Sathish Ninan, Judge** vdv